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This report in the NYT says Hillary Clinton has studied policy briefings, academic papers and taken advice from 200 policy experts, including experts from Bill Clinton's administration such as Alan Blinder, all in an effort to define her own policy positions on issues facing the U.S. This happens at a time different from the period of slow growth when Bill Clinton ran against George H.W. Bush. Since then middle class families face the added problems of not being able to keep up with the rising cost of college education, health care, child care, low interest rates on savings and volatile markets dampening savings growth. For working class Americans in the middle class during Bill Clinton's time in office the problems take the shape of a sharp decline in the manufacturing wages that once supported a middle class life in industrial states of the midwestern U.S., with global competition doing the damage, and few solutions available except improving technology and technical skill of the workforce to compete in higher end products. Consider the points made by Janet Yellen, the Fed chairwoman at a Boston Fed conference in Oct. 2014- Fed information for 2013 showing the average net worth of the lower half of American families representing 62 million households is $11,000. Only this conceals the situation facing one fourth of these families who have zero wealth or negative net worth, and a significant fraction owing more on their homes than they are worth. Hillary Clinton told a audience at the New School in Greenwich Village in New York, this is the defining economic challenge of our time. " We must raise incomes for hard-working Americans so they can afford a middle class life. This will be my mission from the first day I'm president to the last."...

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The health care system is designed to encourage procedure based specialist practices and discourages the patient understanding education and monitoring that occurs with a well designed preventive family physician practice. As a result a patient only spends 30 minutes ayear on average with family physician compared to one hour in other developed nations. In the USA there has been a steady decline in the level and quality and extent of family care and the close one on one rapport with well trained family physicians who enjoyed their work and understood their patients and kept up with their health conditions and provided good and regular advice on these conditions. There is no money in this care as a result first you provide an environment where a whole range of medical conditions can flourish and expand, and then you hit them with a whole series of tests to rule out specific medical conditions. It is a perfect way to expand the testing and let testing flourish, so it would appear that if someone had wanted to start with a goal of letting testing proliferate unhindered then this would be the perfect way to design it. ...

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The Venezuelan government provides gasoline to people in the country at a few cents a gallon- almost free. Even Saudi Arabia, the Emirates and Kuwait which have way better financial balances and dollar reserves do not provide gasoline at such prices. The result is chronic shortages of basic parts and other imports because the government does not have enough dollar reserves for imports. Venezuela devalued its currency by 32% recently, making imports more expensive and pushing inflation up even higher to 28%. The problems it creates are excessive and wasteful use of gasoline, and free gasoline that then provides consumers money to pay for surging cost of everyday imported products. Nullifying any real benefits when shortages, inflation, dilapidated infrastructure and lack of development and jobs, are taken into account. The lack of capital to invest in the oil industry has led to declining production making the situation unsustainable. Yet neither party of Maduro or Capriles in the upcoming April 14, 2013 election, following the death of Chavez, supports ending this subsidy. Efforts to end the subsidy by president Carlos Andres Perez in 1986 led to riots and about hundred deaths in police response, and a coup by Chavez, then a military officer, a few years later. Under Chavez the subsidy was extended to the level at which gasoline is about 4 cents a gallon. Compare this with the price in neighboring Colombia at $4.72 a gallon, and Brazil at $5.40 per gallon. Consumption per capita in Venezuela is excessively high, about seven times per capita than neighboring Columbia. The investment in infrastucture is hobbled by lack of capital, the capital Caracas dilapidated, and no major infrastructure projects taken up by the government. It costs Venezuela 8.6% of GDP or $27 billion to pay for the excessively high subsidy, compared to 3.2% of GDP going to healthcare spending and 5.1% for education. In comparison Indonesia, another developing country, uses 2.5% of GDP or 21 billion for its subsidy for a population of over 200 million. It is not that a fuel subsidy is provided, but the entitlement to free gasoline that makes Venezuela the lone exception. There is a reason why prices in Brazil and China, large developing countries, price gasoline to motorists at over $4 a gallon- to discourage excessive and wasteful use, and release scarce capital for infrastructure development, building dollar reserves for imports of machinery and equipment, and other uses in industrializing economies. Compare Venezuela with Bolivia under the socialist government of Evo Morales. In 2010 Bolivia increased its price of gasoline by 80%. The price in 2013 is about $2.00 per gallon. Morales cushioned the increase by increasing salaries in the health and education sectors, armed forces and police by 20%, and increasing prices of locally produced wheat, corn and rice by 10%. Morales said he did this to reduce state subsidies of $380 million for $660 million in gasoline imports, of which $150 million was siphoned off by smuggling gasoline to neigboring countries. Incentives were provided to oil companies to produce gasoline in Bolivia to reduce imports. ...

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This report by Juan Montes in the WSJ shows how much Lopez Obrador has changed since he lost by a small margin in the 2006 Mexico presidential election. His campaign manager, Tatiana Clouthier, says broadening his appeal to women, evangelicals, middle class Mexicans, rich and poor, is needed for Obrador to win in 2018. In elections in 2006 and 2012 Obrador continued to be seen as the candidate only of the working class. An effort is being made to change this image. Obrador, 64 years old from the party of the left, formed his own party in 2010 after leaving the PRD party. He is a former mayor of Mexico City. Five recent polls show Obrador leading by an average of 7.5 points over Ricardo Analya, the PAN candidate for president which now has the support of the PRD. PAN on the right and PRD on the left are other opposition parties. PAN party formed the government under Felipe Calderon before the current PRI president Nieto now tainted by corruption scandals became president in 2012. If he were to win Obrador would change the way Mexico was governed for 5 decades. His first step would be to review the 91 exploration contracts given by the government under the Nieto administration to check for signs of graft. Corruption is a key platform of the parties running against the current government of president Nieto, for both Obrador and the PAN/PRD alliance candidate Anaya. Obrador says he would keep balanced budget deficits and respect the central bank's autonomy. The shift would be from the current export model that Mexico has supported for 35 years, to one based on import substitution policies, higher salaries, and more government spending for education, jobs programs, healthcare, new oil refineries. With the Trump administration's stance on trade and immigration Mexicans are now showing anger and frustration, with 75% of Mexicans in a Reforma poll looking for change. Both the PAN/PRD and its new face in Ricardo Analya, 38 years old, and the Obrador party see corruption and with it in the Mexican context the rule of law as a key issue.  ...

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Krugman points out that the federal tax rate for the top 1% is 34% in 2013, according to the Congressional Budget Office, because president Obama let the high end Bush tax cuts to expire. It is the number to remember says Krugman- 34. In 2008 the figure was 28.2. Under Hillary Clinton the average tax rate for the top 1% would go up by 3.4 percentage points, according to the Tax Policy Center. Some of this would help pay for the tution plan to provide access to the middle class to public universities. Under populist Trump, Krugman points to the elimination of the inheritance tax and tax rates going down substantially, and no such programs to promote the upward mobility that everyone is talking about, and no way to pay for a big infrastructure building effort for growth and jobs- upward mobility that is the focus of every candidate's election campaign including Sanders, Trump in appealing to older white working class families, Clinton, Ryan, Bush, and others in both parties.   ...

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President Obama proposes changes in taxes to fund programs to aid students such as free 2 years of community college, aid for student loans, and financial help for middle class families. Senate Majority Leader McConnell says the proposals to raise income taxes for high income Americans with $320 billion in new revenues over 10 years, reduced prospects for changes in the tax system. He said the Obama proposals were designed " to excite the base but not designed to pass." Obama says "the shadow of crisis has passed," and calls for "middle class economics," and improving incomes for anyone making the effort. The call comes as inequality widened during the long recession and some of the Obama administration's policies such as on homeowner foreclosure, and lack of focus on unemployment during the first term, may have actually worsened inequality. The call also comes late in the second term in Jan 2015- with presidential elections in 2016- after the Republicans gain control of both Houses of Congress, which is why Republicans dismiss this as mere political talking points for the base....

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According to the General Accountability Office inquiry, 28 drug products had price increases over 100% in 2000, in 2008 71 drug products had such large increases. Medicines like Adderall for attention deficit disorder, Inderal for chest pain, Sumycin for infections were in the list of 416 brand name drug products where makers or distributors raised prices at least once by 100% or more for period 2000-2008. As large pharmaceutical companies sold their marginally profitable drug products or small selling products to smaller companies, these smaller companies would immediately increase prices to recover the money they paid to the large pharmaceutical companies. 26 of the brand name products saw prices raised 10 fold. A third of the drugs with large price increases treat depression and disorders of the central nervous system.

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Estimates show the 50 million Americans enrolled in Medicare today will increase to 80 million by 2030, according to the program's actuaries. Simple demographics as the baby boom generation ages is making controlling the deficit without controlling increase in health care costs as both sides in the fiscal cliff negotiations are attempting to do can only lead to defunding critical areas such as education, R&D and infrastructure, and breaching the safety net for lower income Americans. Health care spending took up 7% of GDP in 1960, increasing to 17.9% of GDP in 2010. Federal spending on healthcare has grown to about 25% in 2012 from 10% in 1960, and is projected to increase to about 33% in ten years by the Congressional Budget Office.

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A study by the National Employment Law Project shows most of the job creation in the economic recovery to 2014 in the U.S. is replacing the better paying jobs with lower paying jobs in fast food retail and similiar low paying industries.

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Elizabeth Rosenthal looks at Obamacare's contribution to cost containment in 2013-2014. Rosenthal says its is a kind of delicate maneuvring at the edges, because serious work needs to be done. The fee-for-service and many of the drivers for increases in medical costs, the old system of pricing, are still in place. In 20 years at the current rate and after Obamacare health care will still take 25% of the U.S. budget if nothing is done. Healthcare costs are about half that of the U.S. in some of the advanced European countries. She calls Obamacare a trickle down theory of cost containment becaue it leaves most of the drivers for cost increase in place and works at the margins. Princeton economist Uwe Reinhardt calls it an ugly patch on a somewhat ugly system. Rosenthal cites the armies of consultants anticipating every move to reduce prices, and working on "strategic billing'' to increase revenues for hospitals and doctors. For those who say the prices are now up more slowly than in the past, Michael Chernew of the Harvard Medical School, has this to say- its like a diet, reminding us that that we haven't even lost weight, just gaining weight slower than before. ...

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Health and Education are the best bets for investment to revive the economy. BW's Mandel says the health and education fiscal channel is still functioning, while other ways of stimulating the economy are in breakdown mode. Taxpayer money given to banks, businesses and households will be saved to pay down high levels of debt and because of uncertainty. But funds directed to schools and hospitals will be spent to buy new equipment, modernize and update, put up new buildings, and hire workers. Health care especially is keen on hiring new nurses, medical technicians, home aides, and so on. And over the past year health care and education workers have risen by 500,000. In these hard times the hardest hit areas like Michigan have seen health and education make up 23.7 % of jobs, while manufacturing has dropped to half that, only 12.5%. And in the past decade health and education has had a stabilizing influence already. Nationally these areas have hired steadily, adding 5.3 million jobs since 1999. Meanwhile the rest of the economy has seen booms and busts, and off shoring and outsourcing overseas, with only 400,000 new jobs created in 10 years. Education has suffered neglect for needed infrastructure including broadband and internet capabilities for classrooms, and health care suffers inefficiencies such as computerization of records, and cost inefficiencies. These areas can be modernized and improved, adding to benefits years from now. They are large sectors employing 30 million workers or 22% of the workforce, and now badly needed to stabilize the economy as these employees are well paid and could help keep consumption from falling badly. A Gallup poll taken in February, shows 56% of Americans showed that education investments were "one of the most important items " for stimulus spending, coming out on top, and beating tax cuts....

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Meltzer points to the huge impact on wages in the U.S. from the millions of workers added to the global economy- as people from India, China and other developing countries competed for the same jobs as American workers- as a principal cause for increasing income inequality. The wages of the one percent were insulated from this and actually benefitted in the case of banking and finance. Current pricing practices in health care insulated the medical and hospital related professions. The effects of the global financial crisis- loss of construction jobs, foreclosures, and effects on savings hit the middle class and working classes hard, something Meltzer overlooks.

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Venezuela faces an uncertain future after U.S. efforts to support Mr. Guaido and call for new free and fair elections have failed. With help from Russia the Venezuelan economy is showing signs of recovery from the steep decline and high inflation in 2019. Oil production is expected to reach 1 million barrels a day in 2020 after falling to 650,000- 700,000 barrels a day in 2019. Russia's oil company Rosneft provides critical help for Venezuelan oil sales and maintenance in oil fields.  National Security Adviser John Bolton is faulted for his advice to president Trump on Venezuela, that merely voicing support for 36 year old Guaido, would lead to regime change without action from the U.S. With the recovery in Venezuela with help from Russia and Cuba, Mr. Guaido's popularity has dropped by 20 points to 38%, according to a Venezuelan pollster Datanalisis. Most Cubans and Venezuelans in the U.S. are in Florida where there is support for new elections, and Mr. Trump continues to support Mr. Guaido. The lack of support for change from other countries including Europe, India, Turkey, and Mexico have led to a stalled situation in Venezuela. There is concern for the steep inflation, the migration of about 4.5 million Venezuelans, the shortages of critical supplies as a result of the economic collapse in 2019. The situation is stabilizing for the government yet the future of Venezuela with U.S. sanctions and weak economy leaves Venezuela in a precarious situation. Venezuela continues to be an example of how well meaning changes for social justice can lead to political changes that bring about economic collapse. This happens  when business and the economy flounder under mismanagement and corruption under crony socialism, a variant of crony capitalism. The old capitalist class and the privileged families who ran the country under its old two party system are gone. Replaced with a new class. The trying out of untested economic ideas in the quest for social balance leads to economic mismanagement, loss of critical human resources which leave the country, and a higher degree of poverty with shortages than before.  Today in Latin America Brazil shows how allowing generous pension benefits at the expense of basic needs and public services in the budget can hurt the economy. Argentina's overborrowing once again shows how this leads to IMF loans and harsh economic austerity. Chile shows how not financing pensions and public services can lead to collapse of public confidence and riots. Venezuela shows how the quest for social justice and reducing privilege can itself get flawed, leading to mass migration of as many as 4.5 million citizens. This happens under models that vary from free enterprise models to socialist or nationalist models showing that models can be less relevant than good sense and good management. In the beginning and for some time each of these models worked well, commodity price supported booms concealed real problems. Avoiding extremes, prudent spending, good investment and hard work, investment in education and infrastructure, building consensus, and good management, is critical for the future to avoid the bad outcomes facing much of Latin America. A lesson also for Asian and African countries that basic virtue is more important than socialism or free enterprise or nationalism when it comes to development.   ...

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Some of the statements on the IMF Blog on Inclusive Growth raises the question-Does the IMF, the International Monetary Fund, as an American institution funding developing countries, and economists, grasp what people find troubling in 2022? One of the lessons of the economic crises for families and workers in the US and other countries is that wisdom, a grasp of the soul of a country and its people through the thinking of its founders, and common sense, should drive managing of economies, with a knowledge of how economies work- not economists. Some of that is already happening. America's central bank is headed by Jerome Powell who has wide experience and has knowledge of how the economy runs, is not an economist. He was chosen by president Trump and continues to have the confidence of president Biden for this very reason. Some of the statements on the IMF economic blog are- "Why jobs are plentiful and workers are scarce" Jan 2022 "In the US and UK recent labor market the puzzle, can be partly explained by mismatch, the pandemic's effect on women and older workers leaving the work force." The Reality Wages for teachers are depressed compared to workers in the financial and economics industries, in a frighteningly disproportionate way. When it comes to logistics, hospitality, leisure and restaurants industries workers were paid poorly for what is hard work and long days. In case the IMF economists, and economists at companies, missed this it was called the Great Resignation, people simply choosing to reject the conditions that were handed down to them by the financial industry and economists who built the economic structures of recent decades. Women leaving the workforce are faced with issues of mental health coping with added responsibilities of children at home for the two years, loss of income and widespread mental health problems. The word mental health may be beyond the grasp of economists and the financial industry, yet it is the one of the biggest problems for people. Another pernicious effect noted on the pages of the WSJ is that young white men are dropping out after school because they cannot afford college in alarming numbers. Leading to the kind of discontent for workers and families that president Biden is struggling to address. On IMF Blog- "IMF Podcasts: The Year in Review" Dec. 2021 "The past year has brought us new challenges even as the old ones persist. If anything, the ongoing pandemic has taught us to think differently abut tackling the challenges and questions when it comes to thinking about big issues such as climate change, gender equality, inflation and economic measurement." The Reality Climate change lumped in with economic measurement and inflation. The floods, fires, river and reservoir water levels affecting access to basic life supporting water, drought, all over the world are of a magnitude that is missed entirely.The response to a challenge of this type requires the kind of leadership that president Biden has provided for the world with his $360 billion climate change bill as just the first step of many, and  comprehensive policies covering all aspects of the climate crisis. ON IMF bog- "How Domestic Violence is a Threat to Economic Development." "Stopping violence against women is not only a moral imperative, new evidence shows it can help the economy." The Reality Domestic violence hurts children growing up in such households. It is not so much a moral imperative as it is bad for men, women and children. So many things are wrong about it and it is made worse in conditions of low wages and poor working conditions in poor neighborhoods lacking education. These neighborhoods are also affected by lack of healthcare and the opioid crisis and mental health issues. Not investing in education and healthcare in these communities is what is simply wrong, and which the founders of America as a nation, particularly Lincoln, would find appalling.   Relationship between Capital (the Financial Industry) and Labor (Workers and Families) On the basic issue of the relationship between capital and labor, the IMF and the financial industry, economists, and the economic structure they built in recent decades, have simply got it wrong. It violates both common sense and wisdom, and violates the spirit of the founders particularly Abraham Lincoln. This is what Abraham Lincoln had to say on Upward Mobility, the ease with which each generation can do better than the one before it, as critical in the fight to save the Union. This is from the Annual Message to Congress Dec. 3, 1861, at the start of the Civil War. That upward mobility has been lost in the US with ideas that "place capital on an equal if not above labor, in the structure of government," for the last three decades in the US after the early post war period of Truman and Eisenhower, Kennedy-Johnson.  And Lincoln says this about a hired laborer being fixed in that condition for life, or of future generations of that hired laborer facing disabilities and burdens, similar to the loss of upward mobility for the people today. "Now there is no such relation between capital and labor as assumed, nor is there any such thing as a free man being fixed for life in the condition of a hired laborer. Both these assumptions are false, and all inferences based on them are groundless." "Labor is prior to, and independent of capital. Capital is only the fruit of labor, and could never have existed, if labor had not first existed. Labor is the superior of capital, and deserves much the higher consideration. Capital has its rights, which are worthy of protection as any other rights." "Again: there is not, of necessity, any such thing as the free hired laborer being fixed to that condition for life. Many independent men everywhere in these states, a few years back in their lives, were hired laborers. The prudent penniless beginner in the world, labors for wages awhile, saves a surplus with which to buy tools or land for himself, then labors on his own account another while, and at length hires another new beginner to help him. This is the just, and generous, and prosperous system, which opens the way to all- gives hope to all, and consequent energy, and progress, and improvement of condition to all." Lincoln even offers this warning- No men living are more worthy to be trusted than those who toil up from poverty- none less inclined to take, or touch, aught which they have not honestly earned. Let them beware of surrendering a political power which they already possess, and which if surrendered, will surely be used to close the door of advancement against such as they, and to fix new disabilities and burdens upon them, till all of liberty shall be lost." US president Biden has these ideas in mind as he struggles with one piece of legislation after another to restore what once was, to open the door of advancement, to remove these disabilities and burdens that Lincoln speaks of, and in so doing restoring liberty.   ...

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A study by AARP of 514 brand name and generic drugs between 2005 and 2009, shows that generic drug prices went down an average of 31% during this period, and brand name drug prices went up by 41%. One of the authors of the report says that it is important to look at individual drug prices and not studies showing total spending on drugs, because this is a significant cost for people paying out-of-pocket, It drives up insurance premiums, and pushes retirees into coverage gaps in Medicare Part D drug program. Analysts indicate pharmaceutical companies are increasing prices on drugs before patent expiration to get as much profit before the patents expire.

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President Obama's program for education includes promoting charter schools, closing failed schools, making teacher pay reflect the quality of education they can provide, and providing financing to support better education and better classrooms. Here he outlined his plans in a major speech on education to an Hispanic group.

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Monica Langley provides an excellent account of how U.S. Education Secretary, Arne Duncan, is using the $100 billion from the Stimulus funds in the 2009 Recovery Act to implement the Common Core education program in U.S. states and districts. Common Core is about raising student math and reading scores and standards, and implementing teacher evaluations based on test scores to make teachers accountable. This is the one significant area in which the Obama administraton in the U.S. is likely to leave a valuable legacy. Republicans in Tennessee, including Lamar Alexander, have embraced the program, showing how Duncan is using his persuasion skills to speed up the implementation across political party lines in a period of strong partisan feelings about programs. When governors have hesitated, Duncan has gone straight to the school districts using the funding. Teachers union say the program is moving too fast as evaluations would affect teacher careers, and Duncan agreed to a one year reprieve on the consequences of new teacher evaluations for states applying for an extension. This makes Duncan uncomfortable. He says he has only three and a half years left and he is going tooo slow. Business leaders such as P&G CEO, Robert McDonald, say the only political party they have is their educated workforce. Duncan has persuaded 40 states in the U.S. to sign up for higher standards in reading and math. Democrats see the Duncan initiative as helping poorer schools, which is also important to reduce the increasing inequality in the U.S. Since 2008 high school graduation rates increased by 3 percentage points, with a 5 point gain for black students and a 7 point gain for Hispanic students. After $4 billon in new funding to low performing schools, so called "dropout factories," the number of such schools has declined to 1424 from 1746. Teachers unions are only gradually adjusting to the need for accountability in math and reading scores. Duncan's father was a psychology professor at the University of Chicago, and Duncan grew up in Chicago neighborhoods before attending Harvard and playing for the basketball team. Duncan tutored younger school students in the afternoon at his mother's after school program in a black neighborhood on the South Side of Chicago. In 2001 he was made the head of the Chicago public school system by Mayor Daley, where he took action to shut down poorly performing schools and reopening them with new staff. All the time he pushed for greater parental choice, charter schools, new teacher talent and using data to track school and student performance. ...

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An average of major opinion polls compiled by Real Clear Politics website shows 50.5% of Americans opposed to the Obama U.S. health care law.

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Friedman reviews Acemoglu and Robinson's new book, "Why Nations Fail." Acemoglu says that nations fail when wealth and opportunities are concentrated in the hands of few people, that a condition for societies to succeed is to create opportunities for more people. For this to happen it is important to create inclusive political and economic institutions. This is an important insight, but for Western society this is an insight as old as Adam Smith when he pointed out the importance of this aspect of western societies after the feudal period in his "Wealth of Nations." For Smith it was the failure to create inclusive societies that led to the gradual unravelling of societies in the river valleys of the Yangste and the Ganges, in China and India, of increasing poverty and the gradual disappearance of what constituted the middle class in India and China. Chapter 8 titled "Of Wages and Labor" in the "Wealth of Nations" makes specific reference to this.